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Healthy Appetite
Alan Miller's hospital acquisitions propel Universal Health Services' growth.
For Alan Miller, founder, chairman and chief executive of Universal Health Services (UHS), a hostile takeover back in 1978 opened the door to entrepreneurship. He has since founded three sizeable companies; two are listed on the NYSE.
Miller had arrived at a company called American Medicorp several years earlier, recruited by a friend from his MBA class at Wharton. But his buddy left to start another firm, and Miller soon became boss. He inherited a mess. The company was nearly insolvent, and its operations, inefficient. Miller spent the next five years reviving it.
Then in 1978, Humana, a Louisville, KY, hospital operator, swooped in with its hostile bid. Miller resisted, forcing Humana to double its offer. He then headed to federal court, still intent on fighting the takeover. In the end, Humana prevailed. "It was an economic battle, and in those, the one who pays the most wins," he says. Miller left as soon as the deal was done.
"The Chairman of Humana offered to make me President, but I had no interest in staying. I started my company the day after the acquisition was complete." The firm he envisioned — Universal Health Services — was similar to the one he left. It, too, would own and operate hospitals. Citigroup's venture arm backed him.
Miller, it seems, had a point to prove about who was best at running hospitals. Nearly, three decades later, he has demonstrated it handily. His company, which trades on the New York Stock Exchange, operates more than 100 hospitals, both acute and psychiatric, and surgery centers across the nation, including, via an unusual partnership, George Washington University Hospital, where U.S. presidents and other dignitaries go for medical care. Last year, UHS reported a profit of $169 million on sales of $3.9 billion. Analysts have called it the best-managed company in its industry.
Humana, for its part, sold off its hospitals in the '90s to focus on managed care.
Miller actually began his career in advertising. He earned his undergraduate degree at the College of William & Mary in Virginia and then did a hitch in the Army, where he says he mostly played basketball. He'd been a college scholarship player, and the commanding general at his base was keen on fielding good sports teams. After the Army came Wharton. Upon graduation in 1960, he took a job in advertising in New York City, his hometown.
"I didn't know what I wanted to do. Some people always want to be a doctor or a lawyer. I didn't have any such calling. I thought business was interesting, always changing, and went into advertising."
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